Questions around the operational independence of the South Africa Reserve Bank (SARB) and public ownership of the institution should be kept separate, President Cyril Ramaphosa said at a media briefing at the World Economic Forum in Davos on Wednesday.
Ramaphosa and Minister of Public Enterprises Pravin Gordhan both said the bank would remain operationally independent in response to questions by reporters.
“It is important to separate the issues,” said Ramaphosa. “[There is] the issue of the ownership of the central bank, and the issue of its independence”
“Many central banks in the world are owned by the government and owned by the state, and only a few central banks remain under private ownership of some sort,” he said.
“The governing party has taken a resolution that the central bank should come under public ownership – that is a separate matter, it is being processed.”
Ramaphosa said the government will not seek to interfere with the bank’s independence, saying the Constitution was clear on how independent the bank should be. “We respect that”.
These views were earlier echoed by Gordhan who spoke about the bank in the absence of Reserve Bank governor Lesetja Kganyago, who was attending another event on Wednesdays afternoon.
“The first thing we want to confirm is, as far as government is concerned… the operational independence of the reserve bank is sacrosanct,” said Gordhan. “Nobody will interfere with that”.
Independence, mandate, ownership
Questions around the Reserve Bank’s independence again surfaced after the ANC, in its recent election manifesto, called for the bank to adopt a more “flexible monetary policy regime”, taking into account other objectives such as employment creation and economic growth.
The party previously also called for the bank to be fully nationalised by doing away with its private shareholders. Talk of nationalisation of the bank has been criticised by business leaders.
Bonang Mohale, the chief executive of Business Leadership South Africa, said over the weekend that the debate around nationalising and changing the mandate of the bank must stop “as it does not send a positive message to markets about the future of the country”.
